Rising Healthcare Costs Can be Tamed
In a recent blog we talked about the impact of inflation on businesses and how prudent executives are seeking ways to save money that will then help fund desired employee programs. Unfortunately, as reported in this SHRM article, rising healthcare costs are outpacing inflation.
The cost of medical care benefits in the U.S. is projected to increase about 8.9 percent in 2024, compared with 8.2 percent in 2023.
Medical costs for employer-sponsored plans, which includes improved technologies, overprescription of treatments or lack of preventative care, continue to outpace inflation, rising on average between 6.8 percent and 7.3 percent.
Some suggestions in the article to flatten the trajectory of the price increases include telehealth options, more well-being services and taking stock of existing benefits. Before any new policies or options are implemented, however, we recommend a comprehensive review of self-funded healthcare claims payments. Only with a professional review can you fully aggregate and analyze health data to identify waste, abuse, or just plain mistakes. Health analytics can then be used to drive process improvements and eliminate ineffective interventions that inflate costs more than necessary.
Find Multiplying Systemic Errors
There is no better time than now – the start of a new year amid soaring costs – to schedule a professional audit of last year’s healthcare claims data. Not only will a healthcare claims audit find instances of overpaid or misallocated claims, but a comprehensive audit will correct any systemic issues that could be carried into 2024. If imbedded problems are not addressed, not only will a self-funded company pay more in increased costs from providers, but the company will also pay more in erroneous claims. If left unchecked, those incorrect claims will keep occurring and the lost dollars will keep growing.
Systemic issues can include abusive and fraudulent practices or inadvertent errors. Fraudulent practices are those that involve intentionally billing at an incorrect rate.
- Upcoding – This involves systematic billing for services at a higher rate than what was actually provided. For example, billing for a 30-minute physician office visit when the patient only received a 15-minute visit.
- Unbundling – Breaking what should be one billing code for a group of procedures into multiple individual codes to maximize reimbursement. This leads to inflated charges.
- Medical necessity errors – Billing for services that aren’t medically necessary for the patient’s condition or care plan. Services should meet insurance criteria for necessity.
Other systemic errors occur due to incorrect information being given to claims processors, leading to ongoing data entry mistakes.
- Incorrect coding – Using the wrong billing code for a service rendered, resulting in incorrect payment rate. Coders may consistently enter certain services incorrectly.
- Coordination of benefits errors – Failing to properly coordinate claims with secondary insurers results in overpayment from the primary insurer. Information systems may have incomplete secondary payer data.
- Eligibility verification failures – Providing services without confirming active health plan enrollment and eligibility, risking denial of claims. Systematic verification checks may be inadequate.
The Cost of Waiting is High
Waiting to find the errors in your healthcare claims data is costing your company money. That money could be passed on to plan participants through reduced deductibles. Or the savings found in duplicate payouts, as an example, can be returned to your bottom line and help fund other initiatives. Costs may be rising, but that doesn’t mean you are without recourse. Contact Healthcare Horizons for an initial review of your administrative plan to determine your best next steps to minimize the impact of rising costs.